Europe's economy rebounds faster than expected - Romania continues to struggle

As overseas orders for exports surge, economic output in the European Union is expected to rise 1.8% this year, a consistent increase over the 1.1% forecast in June. Meanwhile, growth next year is now projected to slow to 1.7%, slightly better than the 1.6% expected just a few months ago.

But it is not an even recovery. Germany, Sweden, Poland and Finland are getting back on their feet quickly, while Greece, Ireland, Spain, Romania and Latvia continue to struggle. And Ireland's troubles seem far from over, though the island nation denied reports that it will need to tap the EU's emergency fund to keep from defaulting on its debts.'We, perhaps for the first time in history, are completely dependent on the global economy and therefore on the need for a global approach,' said Philippe de Buck, director-general of BusinessEurope, a trade group for large companies.Business and labour leaders will meet today (16 November) with top officials from the EU and the European Central Bank. The bi-annual macro-economic dialogue will focus on monetary and budgetary policies, as well as employee wages.

Jobless rate stuck around 10%

Despite new-found stability in the labour market and a small increase in new jobs, the unemployment rate is expected to hover stubbornly around 10% until next year. Worse, one in five workers aged 25 or younger is unemployed.'The unemployment rate of young workers is unacceptable,' De Buck said. 'Our society cannot afford a lost generation.'Labor markets must become more flexible, he stressed, and national pension systems must be reformed. He also urged the EU to speed up implementation of key policies, including the Single Market Act, industrial policy and the digital agenda.

Protectionist policies under fire

The economic recovery is being threatened by protectionist policies, rising commodity prices and tight-fisted lenders, according to BusinessEurope.Temporary import taxes to protect local industries in countries like Russia, Ukraine and Argentina are hurting European business. At the same time, soaring prices for copper, nickel and other commodities have cut into profit margins, while wide swings in the value of the euro make it difficult for companies to plan for the future.Half of the companies that are members of BusinessEurope said they expect to increase their investments in the next six months, but 40% said the cost and access to finance were hindering their investment decisions.